Shell Petroleum Corporation v. Eagle Lumber & Supply Co

• Decision Date: 07 January 1935
• Docket Number: 31499
• Parties: SHELL PETROLEUM CORPORATION v. EAGLE LUMBER & SUPPLY CO
• Court: Mississippi Supreme Court

158 So. 331

171 Miss. 539

SHELL PETROLEUM CORPORATION v. EAGLE LUMBER & SUPPLY CO

No. 31499

Supreme Court of Mississippi

January 7, 1935

Division A

1 EVIDENCE.

Verdicts must be based on evidence and not on speculation.

2 CORPORATIONS.

Evidence whether oil company salesman who was authorized to make contracts with persons for installation of filling stations had authority to contract with lumber company for construction of filling station or that his acts were ratified by oil company, held insufficient for jury.

3 EVIDENCE.

Offer to compromise claim under alleged contract does not evidence either an admission of the making or a ratification of the contract.

HON. S. F. DAVIS, Judge.

APPEAL from the circuit court of Leflore county HON. S. F. DAVIS, Judge.

Action by the Eagle Lumber & Supply Company against the Shell Petroleum Corporation. Judgment for plaintiff, and defendant appeals. Reversed and rendered.

Reversed, and judgment here for appellant.

H. Talbot Odom and Gardner, Denman & Gardner, all of Greenwood, for appellant.

This court has frequently held that the giving of instructions which assume a theory of facts on which there is no evidence is reversible error.

Davis v. Searcy, 79 Miss. 292; Godfrey v. Meridian Light Co., 101 Miss. 565; Jackson Light & Traction Co. v. Taylor, 112 Miss. 60; Mayor, etc., Town of Hickory v. Semmes, 123 Miss. 436; 14 R. C. L. 927, sec. 103.

Walker, the agent, was employed and had been for some time by appellant as its traveling salesman of gasoline and oil, but had no express authority from appellant to make such a contract as that sued on in this case. Our contention is that the court should have excluded plaintiff's testimony after all the testimony was introduced, and that the court erred in not giving the peremptory instruction asked by appellant.

Gray Lbr. Co. v. Shubuta Motor Co., 169 Miss. 393.

It is elementary that a person dealing with the agent of another must know the limitation of authority upon the powers of the agent, and where he has no authority, as in this case, to make any such contract, in the absence of any ground of estoppel, such contracts do not bind his principal.

Hopkins v. Buckley, Terry & Company, 111 Miss. 621; Gruner v. Algonquin, 123 Miss. 157; Ismert v. Natchez, 124 Miss. 205; Allen v. Moss Tie Co., 157 Miss. 392; Gruner Lbr. Co. v. Bank, 143 Miss. 454; Colson v. Stevens, 122 Miss. 797; Wheeler v. McGuire, 86 Ala. 398, 2 L. R. A. 808; 21 R. C. L., p. 928, sec. 107.

The testimony shows that, just as soon as the attention of appellant was called to the fact that such a contract as is alleged had been made, its official came to Greenwood at once and denied the authority of Walker and undertook to arrange a settlement with the appellee by paying the rent notes, which had been agreed upon by appellant with Birdsong, the owner of the lot on which the filling station was erected, which was thirty-five dollars a month for five years, which, of course, would be made subject to the approval of Birdsong, but appellee refused to accept these payments.

21 R. C. L., sec. 34, p. 854, and sec. 107, p. 928; 2 C. J., p. 573, sec. 212, and p. 574, sec. 213.

The apparent power of an agent is to be determined by the acts of the principal, and not by the acts of the agent.

2 C. J., p. 574, sec. 214; page 576, secs. 218 and 219; King v. Levy, 13 So. 282; Peter Schoenhofen Brewing Co. v. Wangler, 57 Ill. 184; Lumber Company v. Motor Company, 169 Miss. 398.

This court will look in vain for one scintilla of truth in the entire record which shows or tends to show that there was ever any sort of ratification of this alleged contract by appellant or any of its officials who had authority to act for it.

2 C. J., p. 214.

Alfred Stoner, of Greenwood, for appellee.

Where an agency has been shown to exist the facts will be liberally construed in favor of a ratification by the principal of the acts of the agent, and very slight circumstances and small matters will sometimes suffice to raise the presumption of ratification, particularly where the act is for the benefit of the principal.

2 C. J. 492; Allen v. T. J. Moss Tie Co., 157 Miss. 392, 128 So. 351; B. C. George & Co. v. Woodruff Furniture Hardware Co., 160 Miss. 13, 133 So. 134.

A person dealing with an agent must know at his peril the extent of the agent's authority to bind the principal, but where the principal has placed the agent in a position where he appears with reasonable certainty to be acting for the principal, and his acts are within the apparent scope of the authority, his acts will bind the principal.

Allen v. T. J. Moss Tie Co., 157 Miss. 392, 128 So. 351; Mayer v. McClure, 36 Miss. 389; 31 Cyc. 1661, 1663; 21 R. C. L. 858, and section 99, Principal and Agent, p. 921; Planters Bank v. Sharp, 4 S. & M. 75.

Even aside from the acceptance of the proposition by the principal in the first instance their subsequent ratification by their superintendent, his promise to pay, his statement that the Shell company had the money ready and was losing interest and the offer by the other agents of the Shell company to pay at the rate of thirty-five dollars per month constituted ratification.

Carey v. Cain, 70 Miss. 628, 13 So. 239; Metzer v. Southern Bank, 54 So. 241.

Of course, no corporation can adopt any rule which will exempt itself in advance from liability for the conduct of its general officers.

Morgan v. Independent Order, 90 Miss. 864, 44 So. 791.

A verdict will stand if no harm was done by an instruction.

Miss. Fire Ins. Co. v. Dixon, 133 Miss. 570, 98 So. 101; Godfrey v. Meridian R. & Light Co., 101 Miss. 565, 58 So. 534; Hattiesburg v. Beverly, 123 Miss. 759, 86 So. 590.

Argued orally by A. F. Gardner, for appellant, and by Alfred Stoner, for appellee.

OPINION

Smith, C. J.

Claiming that it built a house for the appellant under a contract so to do, the appellee sued and recovered a judgment from the appellant for the alleged contract price therefor.

One of the assignments of error is that the court below refused to grant the appellant's request for a directed verdict.

The appellee's claim is that the contract for building the house was made with an agent of the appellant, which agent also accepted the house after its completion. This agent was not a general agent of the appellant, and the making of contracts for the building of houses was not within his express or implied authority. The appellee's contentions are that the making of the contract was (1) within the agent's apparent authority; (2) that he was expressly authorized to make this particular contract; and (3) that the making of the contract was ratified by the appellant.

The appellant is a foreign corporation with an office in New Orleans, Louisiana; the Mississippi territory being under the supervision of that office, and it, in turn, being under the supervision of the St. Louis, Missouri, office. It is engaged in the sale and distribution of petroleum products.

On November 1, 1929, it leased from Birdsong a lot in Schlater, Leflore county, Mississippi, for a period of five years, at a stipulated rental of four hundred thirty dollars per year, payable in equal monthly installments, for use as a filling and service station, the lessor agreeing to erect and equip the station within thirty days thereafter, in default of which the appellant could erect it at a cost not to exceed one thousand two hundred fifty dollars and charge the same to the lessee.

The appellant's business is separated into departments, each having supervision and control of a particular portion of its business. Walker was a member of its sales department in the Mississippi territory, with authority to sell its products and to make contacts with persons for the installation of filling and service stations, but with no authority to make contracts for their construction, but to submit propositions therefor to the appellant's New Orleans office for its approval.

According to the appellee, Walker came into its office early in December, 1929, presented a plan for a filling station for the appellant on the Birdsong lot, and asked for a bid...